Castro Almeida: Portugal stays a net EU beneficiary with 3,100 million euros in 2027

Parish funding under review

Economy minister Manuel Castro Almeida told a parliamentary hearing that about 210 parishes (freguesias) face a funding cut under the 2027 State Budget (OE2027), and that the situation should be corrected during the committee debate. Changes to the distribution criteria mean some parishes would receive less in 2027 than in 2026. He said the Social Democratic Party (PSD) parliamentary group has already proposed guaranteeing that no parish gets a smaller budget next year. The National Association of Parishes (Anafre) said after an extraordinary board meeting on 12 October that its main demands had not been met. Its president, Francisco Branco de Brito, said one parish faces a 9% cut and another a 21% cut. Secretary of State for Local Administration Silvério Regalado told the same hearing that the distribution follows what was negotiated with Anafre and the direct application of the law. The proposal raises parish funding by about 8.2% on average, to 440 million euros, though the amount each parish receives varies.

Housing and municipal credit

Castro Almeida said the government still has room for additional housing measures and announced a credit line that would let municipalities prepare land for construction. The line is being negotiated with the European Investment Bank (EIB). Municipalities would borrow to build urban infrastructure on the land, then repay the loan from the sale of the plots, on terms he called more advantageous through the EIB.

“The housing problem is a very serious problem. It is clear it takes a long time to solve, as it built up over years.”

He said the government reinforced funding for 26,000 homes that the previous Socialist government had assumed under the Recovery and Resilience Plan (PRR), although the budget allocation only covered 16,000. The PRR targets now count 32,000 homes, and the government expects 40,000 homes to be finished by the end of this year. It has also committed to support building around 133,000 homes by 2030 that municipalities listed in their local housing strategies.

Received from EU6,600

Transferred to EU3,500

Net benefit3,100

Received from EU

6600 million euros

Transferred to EU

3500 million euros

Net benefit

3100 million euros

Data from the article text

Income gap and growth

Castro Almeida said GDP per capita is one of the weakest indicators against Europe, at about 80% of the European average, a level Portugal had 30 years ago. If the economy grows as fast as in the first half of this year, he said, Portugal could reach 100% of the European average in 2043. He said the country could recover 12 percentage points in ten years. He denied that Portugal has too much tourism, while acknowledging that some areas and weeks may be crowded. He said overnight stays rose 1.5% and tourism revenue 5%, and called sector wages globally poor, arguing that growth must come from value rather than volume. He added that wages keep rising above inflation according to INE data, though less than he would like because of the Gulf war and fuel costs.

EU funds and the recovery plan

Castro Almeida said Portugal will receive 6,600 million euros from the EU next year and transfer 3,500 million, leaving a net benefit of 3,100 million. About 75% of that benefit comes from Portugal 2030, with the rest mostly from the Common Agricultural Policy strategic plan (PEPAC).

“Portugal is still a net beneficiary of the European Union.”

Secretary of State for Planning and Regional Development Hélder Reis told MPs that fund execution is a demanding task, with difficulties meeting the n+3 rule mainly in the Centro and Algarve regions. He said the government had taken measures to speed up execution. Castro Almeida said that the PRR reached 100% of its milestones and targets by 31 August, but document checks and certification remain. Contracts still unfinished will be amended to drop the clause requiring repayment if works are late, with a new completion deadline of 31 December 2027. Almost 5,000 million euros from Portugal's last PRR payment request will be paid out in 2027. Storm recovery has absorbed 3,030 million euros, and 970 million euros is planned for next year under the PTRR programme. Municipal transfers are set to rise 6%, from 4,410 million to 4,676 million euros.

Current year4,410

OE2027 proposal4,676

Current year

4410 million euros

OE2027 proposal

4676 million euros

Data from the article text

Next steps

The final overall vote on the 2027 budget is scheduled for 24 November, after the committee debate.